The real value proposition of building a business is no longer in selling goods, but in selling debt to customers and profiting from interest rate arbitrage. #TheFiatStandard
From 2017:
"Thus, credit card income now represents more than 40% of Macy's profit."
#TheFiatStandard
fool.com/investing/2017…
"Thus, credit card income now represents more than 40% of Macy's profit."
#TheFiatStandard
fool.com/investing/2017…
Issuing debt is the fiat standard's primitive version of mining bitcoin. A financial institution that issues debt creates new money. Instead of needing to solve a proof-of-work problem, they just need to convince you to take on debt. That's easy & has lousy difficulty adjustment.
Under the fiat standard, the world is drowning in debt because government makes debt into money. As I discuss at length in my book, people always have a strong incentive to increase the supply of whatever is used as money. amazon.com/Bitcoin-Standa…
When rai stones were used as money, overproduction eventually led to the use of gigantic stones that needed many men to move them.
When debt is used as money, every private & public entity's business model becomes interest rate arbitrage.
When debt is used as money, every private & public entity's business model becomes interest rate arbitrage.
Instead of continuing to monetize debt, Bitcoin allows us to monetize a hard asset whose supply can't rise. If hodling continues to outperform interest rate arbitrage, bitcoin could be the technical solution that neatly & peacefully obsoletes the fiat standard.
#TheFiatStandard Business model:
1- Find anything to sell, preferably at a loss
2- Borrow from Fed at 2% ir
3- Give credit cards to customers at ~20% ir
4- People are in debt for stupid things they don't need, but it's ok because money loses value anyway &
5- GDP number go up
1- Find anything to sell, preferably at a loss
2- Borrow from Fed at 2% ir
3- Give credit cards to customers at ~20% ir
4- People are in debt for stupid things they don't need, but it's ok because money loses value anyway &
5- GDP number go up
